This study investigates the drivers behind green banking adoption in the financial sector of Bangladesh, addressing a significant gap in understanding the role of institutional pressures in green banking within emerging economies. Drawing on institutional theory, we examine how coercive, normative, and mimetic pressures influence the adoption of green banking practices among banks and non-bank financial institutions. Through semi-structured interviews with 34 banking professionals and document analysis, we find that coercive pressures from regulators and supra-national organizations significantly drive green banking adoption, while customer pressure is limited. Normative pressures, particularly from global financial networks are more influential than local associations. Furthermore, contrary to institutional theory, mimetic pressures have minimal impact due to clear regulatory guidelines. We also identify a novel pattern where some financial institutions pursue competitive advantage through innovative green banking practices rather than mimicking industry leaders. These findings contribute to the literature of institutional isomorphism by demonstrating the varying influence of institutional pressures in emerging economies and challenging traditional views on customer influence and mimetic behaviours in sustainability transitions. The study provides valuable insights for policymakers and practitioners in developing effective strategies for promoting sustainable banking practices in emerging markets.
